COLONIAL MINES AND ENGLISH CAPITAL.

Otago Witness, Issue 2252, 29 April 1897, Page 18

COLONIAL MINES AND ENGLISH CAPITAL.

We showed in an article in a recent issue that the Australasian colonies had \ produced gold to the value of £375,246,208 up to the end of 1896, and the magnitude of the sura, no less than the circumstances under which gold was discovered, makes the raining industry one that cannot be regarded J with indifference. There is no doubt that the gold discoveries put the hands of the clock forward at least a century in the colonies, and though the phases of gold mining have undergone a complete change, the industry has taken a leading and permanent place, while the recent discoveries in Western Australia seem to prove that the area of its possibilities is much wider than was at first imagined. It has been stated that Western Australia has an auriferous area of 60,000 square miles, of which not i one tenth has been properly prospected, and not one hundredth part developed in anything like a satisfactory manner, and this statement has been accepted by competent authorities as well within the mark. The mines of Queensland have maintained their reputation for : richness, though no large additional area has been opened up. The New South Wales mines are steadily developing into permanence. In Victoria it has been Bhown that quartz lodes maintain their richness at depths formerly considered incredible, thus giving renewed assurance of permanency. IS T ew Zealand has maintained its position, although the decreased output of gold last year seems to prove the contrary. In many cases, however, operations were suspended during the transition period in which most ex- j tensive negotiations were proceeding in England with the view of obtaining capital. The appeal to the British capitalists has been of enormous magnitude. How much was asked for may be surmised from what was obtained." In 1896 there were 90 New Zealand mining companies registered, with a capital of £10,159,450. Of course all this money did not come from a direct appeal to the public for subscriptions for shares. As yet the investing British public have ,very little interest in Australasian mining shares. They are held by speculators. In 1896, for instance, out of a total of 857 mining companies registered in London, with an aggregate nominal capital of £94,419,194, only 186, or about two in every nine, published prospectuses and invited purchases of shares. These 186 had a nominal capital of £30,442,500. Out of a total capital of £25,777,500 owned J>y companies which had actually, purfchased mining properties, £18,27,6,777 went for purchase money, and was allocated thus: About two millions cash, nearly ten millions in shares, and rather more than six millions optional cash or shares. The working capital amounted to £7,500,723, or 29| per cent, of the nominal capital, but the Working capital actually raised was only £5,677,552 or 22 per cent. Vendors held high ideas of the value of their properties in some cases. Ground about Hannan's, in Western Australia, averaged about £2000 an acre, and in two instances the price fixed exceeded £9000 per acre. New Zealand vendors were more modest, prices ranging from £1250 to £5000

per acre. We now append a table showing the Australasian mining companies registered during 1895 and 1896 :— j

The Economist of January 23 points out that there has been outrageous over , capitalisation. Out of a nominal capital of £50,000,000 in nearly 370 West Australian mining companies, the vendors' considerations amounted to about £36,000,000, leaving only £14,000,000 for working capital. Besides this there were about 40 companies, with a nominal capital of £5,000,000, formed for exploiting purposes, so that the British investor was asked for £55,000,000, of which only £14,000.000 was put aside to open up the mines, find machinery, and pay for labour until the mines become self-support-ing. It is evident also that the rudimentary methods of the holders of properties must be abandoned. It does not require a large amount of intelligence or skill in mining to peg off a claim, employ an expert, whether well or little known, to report upon its possibilities, and then rush on the share market asking thousands of pounds for a vendor's interest. This method has succeeded in some few cases, no doubt, but this has been the case because it suited sharebrokers to multiply marketable stock when the " slump " occurred in the Rand. It is now requisite that something more definite " than an " expert's " opinion shall be produced ere the capitalist's pocket is unbuttoned. The real development of the mines is therefore delayed, and it is only the productiveness of the established mines that keeps speculation alive at all.* There must be hundreds of claims

at the present moment on the Thames Peninsula upon which not a pai'ticle of work has been done, because the owners have been hungrily angling for options, and there are also many, on which options have been bought for a small sum, which it is safe to predict will never be successfully floated until some evidence is given of their value. Of the ultimate success of the industry none can doubt. There are mines in the Auckland district steadily yielding increasing returns. The West Coast of this island has a brilliant future before it, now that large capital makes it possible to work to advantage. The Southwestern district has given good promise of developing into a rich field, and in Otage it is fortunate that at least two Home companies have very valuable properties yielding good returns, while other promising claims are about to be vigorously developed. In Australia the outlook is even more promising. In Queensland a record yield is expected this year. Though the yield there for last year showed a slight falling off, it arose from well denned local and non-recurring causes, and yet the dividends paid equalled ,£1 2s 8d per ton of stone treated. In Victoria, as we have said, the lodes are now being exploited at i great depths. There are twelve mines being worked at more than 2000 ft in depth, and one (Lansblt/s) at over 3000 ft. In New South Wales _ the mining industry is promising, especially in the Wyalong district. In Western Australia the strain will be severe for some time, but the industry must eventually emerge triumphant. Though some lodes, like the Londonderry, which were enormously rich at the surface, have proved fitful and delusive, there are others, such as Great Boulder Proprietary, Lake View Consols, Hannan's Brownhill, and Ivanhoe, with milling returns ranging from 3oz to sJoz of gold- per ton apart from tailings, so that permanence is not unknown. When the present reaction passes away, it cannot be doubted that a new and brilliant era in mining will open, and that it will takes its place not aa a medium for

fitful and feverish speculation, but as a steady commercial industry.

«(» Companies,. Capital. | Com- £ panics. :J4,€50,£.61 352 2,270,000 15 ' I ! 1,806 000. 23 800,0' JO S 6L0.000 6 3,708, GOO 90 650, (iOO (S 44,675,451 500 I Capital. £ West Australia ... Victor a ... tfew South Wales ... Queensland south Australia ... New Zealand rasamnia... 342 24 15 8 37.746,309 1,627*000 i 3,218 500 5*75,500 4 626,000 35 8 10,159 450 531,000 I 435